SCEG OATT Formula Transmission Rate Filing.pdf - SCANA ...

20091231-0037 FERC PDF (Unofficia1) 12/29/2009
Direct Testimony of Alan C. Heintz
Docket ER10- -000
Page 27 of28
Exhibit No. SCE-8
The unamortized balance of these deferred costs is also shown on Attachment 5 and will
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be included as a rate-base adjustment on line 57 of the formula, Appendix A. The annual
amortization (an expense) is included at line 65 of the formula. Thus, the annual expense
and the return and taxes on the unamortized balance of GridSouth costs will be a
component of the net revenue requirement from which the transmission service rate is
derived. After the amortization period, GridSouth costs will have no effect on the
transmission rate.
8 Q,
ARE GRID SOUTH COSTS PROPOSED TO BE RECOVERED IN THE INITIAL
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(PARTIAL)
RATE PERIOD?
10 A.
No.
Even though the development of the GridSouth costs is shown in Attachment 5 of
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Exhibit SCE-II,
for calculative convenience and to reduce the amount of the initial rate
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increase, SCE&G proposes that recovery of the GridSouth surcharge begin (and end)
over a full rate year; hence, the proposed beginning at June 1, 20 I0 and termination at
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May 31, 2015.
The fact that the amortization of the surcharge does not begin until the
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20 10 rate year is memorialized in Note Q of Appendix A. SCE&G also proposes that at
the end of the five-year amortization period, SCE&G will compare surcharge revenues
collected against surcharge costs and true-up the two amounts on a one-time basis during
the rate year beginning June 1,2016.
19 Q.
WHAT IS THE RATE IMPACT OF THE GRIDSOUTH SURCHARGE?
20 A.
The rate impact of the surcharge is estimated to be about $0.13 per kw/month.
The initial
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monthly transmission rate (2008 costs) is $1.75 per kw/month, so the surcharge will be